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Please explain in details, and I don't want answers copied from other WEBSITES ANSWERS . Thanks! #1 In the three-period binomial model, suppose that S0=3,u=23

Please explain in details, and I don't want answers copied from other WEBSITES ANSWERS. Thanks!

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In the three-period binomial model, suppose that S0=3,u=23 d=32. Assume that the interest rate is r=41. Consider a lookback option that pays off V3=(max0n3Sn)S3 At time 3. (a) What are the risk-neutral probabilities? (b) What is the no-arbitrage price of the option at time zero? (c) Use the delta-hedging formulas to find all n 's. In the three-period binomial model, suppose that S0=3,u=23 d=32. Assume that the interest rate is r=41. Consider a lookback option that pays off V3=(max0n3Sn)S3 At time 3. (a) What are the risk-neutral probabilities? (b) What is the no-arbitrage price of the option at time zero? (c) Use the delta-hedging formulas to find all n 's

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